Maxims for Building a Successful NSP Strategy:
- Understand the “spirit and the intent” of the NSP law as it's written. As a jurisdiction, can you determine the causal connection between the regulations and your market's foreclosure situation?
- Do you have the requisite, “in-house” capacity to handle this program?Once you established the causal connection, does your “Business Model” take into consideration the unique characteristics of your housing market? If you do not possess the capacity, determine the type of staff you want to hire to manage your program.
- Real Estate Professionals are in abundance right now. Take advantage of this resource to help manage this process. They understand the market dynamics, are adept at strategic marketing, and have “built-in” relationships with lenders and have a better grasp of the “inertia” that typically exists in the housing market.
- Have a relevant marketing strategy. Once the basis for the program is established for your jurisdiction, target those population segments for direct marketing efforts. This is a critical element every jurisdiction needs to be mindful of. If you treat the NSP funding like a typical federal grant, you will get overwhelmed. Because of this complexity and compressed time frames for implementation, jurisdictions must be flexible, aggressive, and sensitive to the markets in which they operate. This cannot be stressed enough!
- Prepare and analyze financial models that are relevant to your housing market. Know what the market can “bear” and thoroughly understand the layering that will constitute each deal. Have parameters instituted that will allow your staff to quickly analyze a potential acquisition to see if it is financially viable.
- When you factor in developer's fees, real-estate fees, closing costs, attorney fees, rehab costs, etc., you quickly realize that the “discounted” acquisition price will diminish once all fees are built-in for the final sales price.